What’s Going On Here?TSMC – the world’s biggest contract chipmaker – bucked a wider chip industry slump to report bumper quarterly revenue growth on Friday. What Does This Mean?The $550 billion chip industry has seen better days, with chipmakers across the board warning of stock buildups and customers cutting back on orders. That’s prompted Micron Technology and Kioxia Holdings to cut output, in the hopes of fending off a price crash. Add in AMD’s third quarter sales missing estimates by over $1 billion, and Samsung Electronics reporting its first drop in profit since 2019, and the overall picture looks pretty grim. But while rivals are floundering, TSMC – the world’s most advanced maker of silicon chips – has smugly expanded its already impressive market share. The company declared a better-than-expected 48% uptick in revenue versus the same quarter last year – notching up $19.4 billion over the three months in question. Why Should I Care?Zooming in: How do you like them Apples?
As Apple’s chipmaker-in-chief, TSMC has bagged tons of big contracts providing chips for the world-famous firm's cutting-edge devices. But now that disappointing demand is reportedly prompting Apple to nix plans for increased iPhone production, revenue streams from electronics no longer look as promising. TSMC isn’t waiting for them to dry up though: the Taiwanese firm has been looking for growth in other areas like chips for cars, betting on booming demand as more and more vehicles become reliant on digital technology.
The bigger picture: Lucky for some.
It’s likely that the industry-wide slowdown will eventually come knocking on TSMC’s door too. But when it does, these promising results – and TSMC’s huge industry clout – mean it’ll probably receive a feeble tap rather than the outright thumping some competitors have taken. What’s more, any trouble could be brief: analysts at Morgan Stanley projected last week that the semiconductor industry would return to growth as early as the second half of 2023. | 